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There is also no doubt for the CRA that cryptocurrencies are a growing part of the underground economy.
“Given the pseudo-anonymous nature of cryptocurrencies, the extent of non-compliance with Canadian tax obligations is difficult to measure; however, the CRA assumes the risk of non-compliance is high, ”the CRA spokesperson said in an email.
Some of our surveys have a cryptocurrency component
According to Piccolo, the CRA’s decision is significant because it is the first known time that the agency actively seeks such a large amount of information from clients of a cryptocurrency trading platform.
But he says it will also be a test of the agency’s ability to process the likely massive amounts of data that typically accompany cryptocurrency transactions. If all goes well, he says we can expect more of these kinds of requests from the tax agency.
“What’s really relevant is that Coinsquare apparently has over 200,000 accounts,” Piccolo explained. “The CRA can take on these kinds of large-scale projects because it has increased its capacity to process large chunks of information.”
The tax expert also says that this type of request, if successful, can be a powerful deterrent for other Canadian traders who believe the CRA will never find out that they are engaged in currency trading. virtual if they never declare it themselves. Regardless of Coinsquare’s response, the agency’s request must be approved by a federal court judge.
Lately, the CRA has increasingly warned ‘crypto’ users and traders that they will come under much greater scrutiny due to the potential use of virtual currencies to hide income, launder money. money and ultimately avoid paying taxes.